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Franklin Templeton Small Business Retirement Plans EMPLOYER’S WORKBOOK & FORMS SIMPLE IRA SEP IRA
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Page 1: Franklin Templeton Small Business Retirement PlansSmall Business Retirement Plans EMPLOYER’S WORKBOOK ... c/o Retirement Services c/o Retirement Services c/o Retirement Services

Franklin Templeton Small Business Retirement Plans

EMPLOYER’S WORKBOOK& FORMS

• SIMPLE IRA

• SEP IRA

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TABLE OF CONTENTS

Franklin Templeton SIMPLE IRA

How to Get Started . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SIMPLE IRA Employer Contribution Worksheet . . . . . . . . . . . 2

SIMPLE IRA Employer Agreement . . . . . . . . . . . . . . . . . . . . 3

Model Notification to Eligible Employees . . . . . . . . . . . . . . .5

Model Salary Reduction Agreement . . . . . . . . . . . . . . . . . . . 6

General Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Franklin Templeton SEP IRA

How to Get Started . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

SEP IRA Employer Agreement . . . . . . . . . . . . . . . . . . . . . . 10

Franklin Templeton eContributions Services

eContributions Services Employer Application . . . . . . . . . . . 13

eContributions New User Request Form . . . . . . . . . . . . . . . 15

eContributions How to Fund Your Plan . . . . . . . . . . . . . . . . 16

For assistance with completing forms and documents,

please contact your financial advisor or Franklin Templeton

Retirement Services at (800) 527-2020.

Not FDIC Insured | May Lose Value | No Bank Guarantee

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Franklin Templeton SIMPLE IRA How to Get Started

1. Complete and sign the SIMPLE IRA Employer Agreement (IRS Form 5304-SIMPLE) on pages 3 and 4.

2. Complete and sign the eContributions Services Employer Application on page 13 and eContributions

New User Request Form on page 15 to set up electronic delivery of your payroll contribution instructions.*

eContributions is a secure, proprietary, online payroll contribution instruction system that provides a

cost-efficient way to transmit plan contribution instructions, as well as access to current or historical

participant contribution information.

3. Inform your employees that you’ve established a Franklin Templeton SIMPLE IRA. A sample Employee

Notification is provided on page 5. Employees must also receive a copy of the completed SIMPLE IRA

Employer Agreement (pages 3 and 4) 60 days prior to becoming eligible for the plan. (Note: SIMPLE

IRAs must be adopted by October of the first plan year.) You should also provide your employees with the

Franklin Templeton SIMPLE IRA Employee’s Guide and the Franklin Templeton SIMPLE and SEP

IRA Employee’s Forms Booklet. Ask your financial advisor for these employee materials, order them

online at franklintempleton.com or call Franklin Templeton at (800) 527-2020. Your financial advisor

can also meet with your employees to explain the plan in more detail.

4. After reviewing prospectuses, employees will need to decide which Franklin Templeton funds they’d like

to invest in and must complete a Franklin Templeton SIMPLE/SEP IRA Application (included in the

Franklin Templeton SIMPLE and SEP IRA Employee’s Forms Booklet). Employees must also complete

a Salary Reduction Agreement (sample provided on page 6). If an employee would like to transfer a

SIMPLE IRA account from another trustee to Franklin Templeton, he/she will also need to complete

a Franklin Templeton SIMPLE/SEP IRA Transfer Request Form (included in the Franklin Templeton

SIMPLE and SEP IRA Employee’s Forms Booklet).

5. Send copies of the completed SIMPLE IRA Employer Agreement, eContributions Services Employer

Application, eContributions New User Request Form, and all SIMPLE/SEP IRA employee applications to

one of the addresses noted below. You should be sure to keep copies for your records. If including a

check, be sure to include instructions for allocating the contributions to each participant. Future

contribution instructions will be submitted online through eContributions at ftecontributions.com.

* There is no fee to use eContributions, but there may be a fee assessed to those electing not to use the system.

Please mail to WEST COAST EAST COAST OVERNIGHT ADDRESS

Franklin Templeton Bank & Trust, F.S.B. Franklin Templeton Bank & Trust, F.S.B. Franklin Templeton Bank & Trust, F.S.B.c/o Retirement Services c/o Retirement Services c/o Retirement ServicesP.O. Box 997153 P.O. Box 33033 3344 Quality DriveSacramento, CA 95899-7153 St. Petersburg, FL 33733-8033 Rancho Cordova, CA 95670-7313

1Questions? Please call your financial advisor or Franklin Templeton Retirement Services at (800) 527-2020.

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2 Questions? Please call your financial advisor or Franklin Templeton Retirement Services at (800) 527-2020.2

SIMPLE IRA Employer Contribution Worksheet

We’ve provided the following worksheet to help you estimate your matching contributions andcompare the potential costs between the employer contribution options. In Option 1, you can estimateboth the standard 3% match as well as the 1% match available in any two out of five years. Option 2provides the calculation for a standard 2% match. Remember that your actual contributions will varyeach year depending on the number of eligible employees, their compensation, the number ofemployees who elect to make salary reduction contributions and the amount of their contributions.

Option 1: Employer Matching Contribution Example Your Company

1. Average annual pre-tax compensation of eligible employeesyou expect will contribute to the plan.

2. Average percentage of salary you estimate participants willdefer to the plan.

3. Average participant contribution (multiply line 1 by line 2).

4. Total number of eligible employees you expect will contributeto the plan.

5. Multiply line 1 by 3% to get the average employer matching contribution: 3% match.1

6. Multiply line 5 by line 4 to get your total matching contribution.

— OR —

7. Multiply line 1 by 1% to get the average employer matching contribution: 1% match.2

8. Multiply line 7 by line 4 to get your total matching contribution.

Option 2: Employer Non-Elective Contribution Example Your Company

1. Average annual compensation of your eligible employees.3

2. Average employer contribution per eligible employee (multiply line 1 by 2%).

3. Total number of eligible employees.

Multiply line 2 by line 3 to get the total estimated annual employer contribution with a 2% non-elective contribution option.

It may be possible to switch between these two contribution options in a future year, provided certainnotification requirements are met.

$ 30,000 $

5% %

$ 1,500 $

10

$ 900 $

$ 9,000 $

$ 300 $

$ 3,000 $

$ 30,000 $

$ 600 $

10

$ 6,000 $

1. Maximum annual employer contribution limit per participating employee is 3% of an employee’s compensation or $11,500 in 2010 and 2011, whichever is less. This worksheet assumes the average percentage of salary deferred by employees is 3% or more.2. Available in any two out of five years.3. Maximum compensation on which employer non-elective contributions can be based is $245,000 for 2010 and 2011.

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3Questions? Please call your financial advisor or Franklin Templeton Retirement Services at (800) 527-2020.

SIMPLE IRA Employer Agreement

Franklin Templeton Bank & TrustSavings Incentive Match Plan for

Employees of Small Employers (SIMPLE)(Not for Use With a Designated Financial Institution)

ARTICLE I—EMPLOYEE ELIGIBILITYREQUIREMENTS

(Complete applicable box(es) and blanks—see instructions.)

1. GENERAL ELIGIBILITY REQUIREMENTS. TheEmployer agrees to permit salary reduction contribu-tions to be made in each calendar year to the SIMPLEIRA established by each employee who meets thefollowing requirements (select either 1a or 1b):

a � FULL ELIGIBILITY. All employees are eligible.

b � LIMITED ELIGIBILITY. Eligibility is limited toemployees who are described in both (i) and (ii) below:

(i) CURRENT COMPENSATION. Employeeswho are reasonably expected to receive at least$__________________ in compensation (not toexceed $5,000) for the calendar year.

(ii) PRIOR COMPENSATION. Employees whohave received at least $__________________ incompensation (not to exceed $5,000) duringany __________ calendar year(s) (insert 0, 1, or 2) preceding the calendar year.

2. EXCLUDABLE EMPLOYEES

� The Employer elects to exclude employeescovered under a collective bargaining agreementfor which retirement benefits were the subject ofgood faith bargaining.

Note: This box is deemed checked if the Employer maintains a qualified plan covering only such employees.

ARTICLE II—SALARY REDUCTIONAGREEMENTS

(Complete the box and blank, if applicable—see instructions.)

1. SALARY REDUCTION ELECTION. An eligibleemployee may make an election to have his or hercompensation for each pay period reduced. Thetotal amount of the reduction in the employee’scompensation for a calendar year cannot exceedthe applicable amount for that year.

2. TIMING OF SALARY REDUCTION ELECTIONS

a For a calendar year, an eligible employee maymake or modify a salary reduction election duringthe 60-day period immediately preceding January 1of that year. However, for the year in which theemployee becomes eligible to make salary reduc-tion contributions, the period during which theemployee may make or modify the election is a 60-day period that includes either the date theemployee becomes eligible or the day before.

b In addition to the election periods in 2a, eligible employees may make salary reduction elections or modify prior elections ––––––––––––––,

____________________________________________

____________________________________________

____________________________________________

____________________________________________.

If the Employer chooses this option, insert a periodor periods (for example, semi-annually, quarterly,monthly, or daily) that will apply uniformly to alleligible employees.

c No salary reduction election may apply tocompensation that an employee received, or had a right to immediately receive, before execution ofthe salary reduction election.

d An employee may terminate a salary reductionelection at any time during the calendar year. � Ifthis box is checked, an employee who terminates asalary reduction election not in accordance with 2bmay not resume salary reduction contributionsduring the calendar year.

ARTICLE III—CONTRIBUTIONS

(Complete the blank, if applicable—see instructions.)

1. SALARY REDUCTION CONTRIBUTIONS. Theamount by which the employee agrees to reducehis or her compensation will be contributed by theEmployer to the employee’s SIMPLE IRA.

2a MATCHING CONTRIBUTIONS

(i) For each calendar year, the Employer willcontribute a matching contribution to eacheligible employee’s SIMPLE IRA equal to theemployee’s salary reduction contributions up toa limit of 3% of the employee’s compensationfor the calendar year.

(ii) The Employer may reduce the 3% limit forthe calendar year in (i) only if:

(1) The limit is not reduced below 1%;

(2) The limit is not reduced for more than 2 calendar years during the 5-year periodending with the calendar year the reductionis effective; and

(3) Each employee is notified of thereduced limit within a reasonable period oftime before the employees’ 60-day electionperiod for the calendar year (described inArticle II, item 2a).

b NONELECTIVE CONTRIBUTIONS

(i) For any calendar year, instead of makingmatching contributions, the Employer maymake nonelective contributions equal to 2% ofcompensation for the calendar year to theSIMPLE IRA of each eligible employee who hasat least $____________________, (not more than$5,000) in compensation for the calendar year.No more than $230,000* in compensation canbe taken into account in determining thenonelective contribution for each eligible employee.

(ii) For any calendar year, the Employer maymake 2% nonelective contributions instead ofmatching contributions only if:

(1) Each eligible employee is notified thata 2% nonelective contribution will be madeinstead of a matching contribution; and

(2) This notification is provided within areasonable period of time before the employees’ 60-day election period for thecalendar year (described in Article II, item 2a).

3. TIME AND MANNER OF CONTRIBUTIONS

a The Employer will make the salary reductioncontributions (described in 1 above) for each eligi-ble employee to the SIMPLE IRA established atthe financial institution selected by that employeeno later than 30 days after the end of the month inwhich the money is withheld from the employee’spay. See instructions.

b The Employer will make the matching ornonelective contributions (described in 2a and 2b above) for each eligible employee to the SIMPLEIRA established at the financial institution selectedby that employee no later than the due date forfiling the Employer’s tax return, including exten-sions, for the taxable year that includes the lastday of the calendar year for which the contribu-tions are made.

*This is the amount for 2008. For later years, the limitmay be increased for cost of living adjustments. The IRSannounces the increase, if any, in a news release, in theInternal Revenue Bulletin, and on the IRS’ internetwebsite at www.irs.gov.

ARTICLE IV—OTHER REQUIREMENTS AND PROVISIONS

1. CONTRIBUTIONS IN GENERAL. The Employerwill make no contributions to the SIMPLE IRAsother than salary reduction contributions(described in Article III, item 1) and matching ornonelective contributions (described in Article III,items 2a and 2b).

2. VESTING REQUIREMENTS. All contributionsmade under this SIMPLE IRA plan are fully vestedand nonforfeitable.

3. NO WITHDRAWAL RESTRICTIONS. TheEmployer may not require the employee to retainany portion of the contributions in his or herSIMPLE IRA or otherwise impose any withdrawal restrictions.

4. SELECTION OF IRA TRUSTEE. The Employermust permit each eligible employee to select thefinancial institution that will serve as the trustee,custodian, or issuer of the SIMPLE IRA to whichthe Employer will make all contributions on behalfof that employee.

5. AMENDMENTS TO THIS SIMPLE IRA PLAN.This SIMPLE IRA plan may not be amended exceptto modify the entries inserted in the blanks orboxes provided in Articles I, II, III , VI and VII.

6. EFFECTS OF WITHDRAWALS AND ROLLOVERS

a An amount withdrawn from the SIMPLE IRA isgenerally includible in gross income. However, aSIMPLE IRA balance may be rolled over or transferred on a tax-free basis to another IRAdesigned

_________________________________________________________________ establishes the following SIMPLE IRA plan under Section 408(p) of the Internal Revenue

Code and pursuant to the instructions contained in this form.

Form

5304-SIMPLE(Rev. September 2008)Department of the Treasury Internal Revenue Service

OMB No. 1545-1502

DO NOT FILE WITH THE INTERNAL REVENUE SERVICE

Name of Employer

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SIMPLE IRA Employer Agreement (cont’d)

Questions? Please call your financial advisor or Franklin Templeton Retirement Services at (800) 527-2020.444

solely to hold funds under a SIMPLE IRA plan. Inaddition, an individual may roll over or transfer his orher SIMPLE IRA balance to any IRA after a two-yearperiod has expired since the individual first partici-pated in any SIMPLE IRA plan of the Employer. Anyrollover or transfer must comply with the requirements under Section 408.

b If an individual withdraws an amount from aSIMPLE IRA during the 2-year period beginningwhen the individual first participated in anySIMPLE IRA plan of the Employer and the amountis subject to the additional tax on early distribu-tions under Section 72(t), this additional tax isincreased from 10% to 25%.

ARTICLE V—DEFINITIONS

1. COMPENSATION

a GENERAL DEFINITION OF COMPENSATION.Compensation means the sum of the wages, tipsand other compensation from the Employer subjectto federal income tax withholding [as described inSection 6051(a)(3)], the amounts paid for domes-tic service in a private home, local college club, orlocal chapter of a college fraternity or sorority, andthe employee’s salary reduction contributions madeunder this plan, and, if applicable, elective defer-rals under a Section 401(k) plan, a SARSEP, or aSection 403(b) annuity contract and compensationdeferred under a Section 457 plan required to bereported by the Employer on Form W-2 [asdescribed in Section 6051(a)(8)].

b COMPENSATION FOR SELF-EMPLOYEDINDIVIDUALS. For self-employed individuals,compensation means the net earnings from self-employment determined under Section 1402(a),without regard to section 1402(c)(6), prior tosubtracting any contributions made pursuant tothis plan on behalf of the individual.

2. EMPLOYEE. Employee means a common-lawemployee of the Employer. The term employee alsoincludes a self-employed individual and a leasedemployee described in Section 414(n) but does notinclude a nonresident alien who received no earnedincome from the Employer that constitutes incomefrom sources within the United States.

3. ELIGIBLE EMPLOYEE. An eligible employeemeans an employee who satisfies the conditions in Article I, item 1 and is not excluded underArticle I, item 2.

4. SIMPLE IRA. A SIMPLE IRA is an individualretirement account described in Section 408(a),or an individual retirement annuity described inSection 408(b), to which the only contributionsthat can be made are contributions under aSIMPLE IRA plan and rollovers or transfers fromanother SIMPLE IRA.

ARTICLE VI—PROCEDURES FOR WITHDRAWAL

[The Employer will provide each employee with the procedures for withdrawals of contributions received by thefinancial institution selected by that employee, and that financial institution’s name and address (by attachingthat information or inserting it in the space below) unless: (1) that financial institution’s procedures areunavailable, or (2) that financial institution provides the procedures directly to the employee. See sampleEmployee Notification on page 5.]

ARTICLE VII—EFFECTIVE DATE

This SIMPLE IRA plan is effective ________________________________________________. (See instructions.)

Name of Employer

Address of Employer

By: Signature

Date

Name and Title

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Model Notification to Eligible Employees

I. Opportunity to Participate in the SIMPLE IRA Plan

You are eligible to make salary reduction contributions to the _______________________________________________(plan sponsor’s name) SIMPLE IRA plan. This notice and the attached summary description provide youwith information you should consider before you decide whether to start, continue or change your salary reduction agreement.

II. Employer Contribution Election

For the ______ calendar year, the employer elects to contribute to your SIMPLE IRA [employer must selecteither (1), (2) or (3)]:

� (1) A matching contribution equal to your salary reduction contributions up to a limit of 3% of yourcompensation for the year;

� (2) A matching contribution equal to your salary reduction contributions up to a limit of ______% (employer must insert a number from 1 to 3 and is subject to certain restrictions) of your compensationfor the year; or

� (3) A nonelective contribution equal to 2% of your compensation for the year (limited to $230,000*) if you are an employee who makes at least $_____________ (employer must insert an amount that is $5,000 or less) in compensation for the year.

III. Administrative Procedures

To start or change your salary reduction contributions, you must complete the salary reduction agreement and return it to ________________________________________ (employer should designate a place or individual) by__________________________ (employer should insert a date that is not less than 60 days after notice is given).

IV. Employee Selection of Financial Institution

You must select the financial institution that will serve as the trustee, custodian or issuer of your SIMPLEIRA and notify your employer of your selection.

*This is the amount for 2008. For later years, the limit may be increased for cost of living adjustments. The IRS

announces the increase, if any, in a news release, in the Internal Revenue Bulletin, and on the IRS website at www.irs.gov.

5

(continued)

Questions? Please call your financial advisor or Franklin Templeton Retirement Services at (800) 527-2020.

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6 Questions? Please call your financial advisor or Franklin Templeton Retirement Services at (800) 527-2020.

Model Salary Reduction Agreement

I. Salary Reduction Election

Subject to the requirements of the SIMPLE IRA plan of ___________________________________________________ (nameof employer) I authorize ________% or $_______________ (which equals ________% of my current rate of pay) to bewithheld from my pay for each pay period and contributed to my SIMPLE IRA as a salary reduction contribution.

II. Maximum Salary Reduction

I understand that the total amount of my salary reduction contributions in any calendar year cannot exceedthe applicable amount for that year. See instructions.

III. Date Salary Reduction Begins

I understand that my salary reduction contributions will start as soon as permitted under the SIMPLE IRAplan and as soon as administratively feasible or, if later, _____________________________________. (Fill in the dateyou want the salary reduction contributions to begin. The date must be after you sign the agreement.)

IV. Employee Selection of Financial Institution

I select the following Financial Institution to serve as the trustee, custodian, or issuer of my SIMPLE IRA.

Franklin Templeton Bank & Trust, F.S.B.Name of financial institution

One Franklin Parkway, San Mateo, CA 94403-1906Address of financial institution

SIMPLE IRA account name and number

I understand that I must establish a SIMPLE IRA to receive any contributions made on my behalf under this SIMPLE IRA plan. If the information regarding my SIMPLE IRA is incomplete when I first submit mysalary reduction agreement, I realize that it must be completed by the date contributions must be madeunder the SIMPLE IRA plan. If I fail to update my agreement to provide this information by that date, I understand that my employer may select a financial institution for my SIMPLE IRA.

V. Duration of Election

This salary reduction agreement replaces any earlier agreement and will remain in effect as long as I remainan eligible employee under the SIMPLE IRA plan or until I provide my employer with a request to end mysalary reduction contributions or provide a new salary reduction agreement as permitted under this SIMPLEIRA plan.

Date

XSignature of Employee

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Form 5304-SIMPLE (Rev. August 2005)

7Questions? Please call your financial advisor or Franklin Templeton Retirement Services at (800) 527-2020.

GENERAL INSTRUCTIONS

Section references are to the Internal RevenueCode unless otherwise noted.

PURPOSE OF FORM

Form 5304-SIMPLE is a model Savings IncentiveMatch Plan for Employees of Small Employers(SIMPLE) plan document that an employer may useto establish a SIMPLE IRA plan described inSection 408(p), under which each eligibleemployee is permitted to select the financial insti-tution for his or her SIMPLE IRA.

These instructions are designed to assist in theestablishment and administration of the SIMPLEIRA plan. They are not intended to supersede anyprovision in the SIMPLE IRA plan.

Do not file Form 5304-SIMPLE with the IRS.Instead, keep it with your records.

For more information, see Publication 560,Retirement Plans for Small Business (SEP,SIMPLE, and Qualified Plans), and Publication590, Individual Retirement Arrangements (IRAs).

Note. If you used the March 2002 or August 2005version of Form 5304-SIMPLE to establish a modelSavings Incentive Match Plan, you are not requiredto use this version of the form.

WHICH EMPLOYERS MAY ESTABLISH ANDMAINTAIN A SIMPLE IRA PLAN?

To establish and maintain a SIMPLE IRA plan, youmust meet both of the following requirements:

1. Last calendar year, you had no more than 100employees (including self-employed individuals)who earned $5,000 or more in compensation fromyou during the year. If you have a SIMPLE IRA planbut later exceed this 100-employee limit, you willbe treated as meeting the limit for the 2 yearsfollowing the calendar year in which you last satis-fied the limit.

2. You do not maintain during any part of thecalendar year another qualified plan with respect towhich contributions are made, or benefits areaccrued, for service in the calendar year. For thispurpose, a qualified plan [defined in Section219(g)(5)] includes a qualified pension plan, aprofit sharing plan, a stock bonus plan, a qualifiedannuity plan, a tax-sheltered annuity plan, and aSimplified Employee Pension (SEP) plan. A quali-fied plan that only covers employees covered undera collective bargaining agreement for which retire-ment benefits were the subject of good faithbargaining is disregarded if these employees areexcluded from participating in the SIMPLE IRAplan. If the failure to continue to satisfy the 100-employee limit or the one-plan rule described in 1and 2 above is due to an acquisition or similartransaction involving your business, special rulesapply. Consult your tax advisor to find out if youcan still maintain the plan after the transaction.

Certain related employers (trades or businessesunder common control) must be treated as a singleemployer for purposes of the SIMPLE IRA require-ments. These are: (1) a controlled group of corpora-tions under section 414(b); (2) a partnership orsole proprietorship under common control undersection 414(c); or (3) an affiliated service groupunder section 414(m). In addition, if you haveleased employees required to be treated as yourown employees under the rules of Section 414(n),then you must count all such leased employees forthe requirements listed above.

WHAT IS A SIMPLE IRA PLAN?

A SIMPLE IRA plan is a written arrangement thatprovides you and your employees with an easy wayto make contributions to provide retirement incomefor your employees. Under a SIMPLE IRA plan, em -ployees may choose whether to make salary reduc-tion contributions to the SIMPLE IRA plan ratherthan receiving these amounts as part of their regu-lar compensation. In addition, you will con tributematching or nonelective contributions on behalf ofeligible employees (see Employee EligibilityRequirements and Contributions section on page7). All contributions under this plan will bedeposited into a SIMPLE individual retirementaccount or annuity established for each eligibleemployee with the financial institution selected byhim or her.

WHEN TO USE FORM 5304-SIMPLE

A SIMPLE IRA plan may be established by usingthis Model Form or any other document that satis-fies the statutory requirements.

DO NOT use Form 5304-SIMPLE if:

1. You want to require that all SIMPLE IRA plancontributions initially go to a financial institutiondesignated by you. That is, you do not want topermit each of your eligible employees to choose afinancial institution that will initially receive contributions. Instead, use Form 5305-SIMPLE,Savings Incentive Match Plan for Employees ofSmall Employers (SIMPLE)—for Use With aDesignated Financial Institution.

2. You want employees who are nonresident aliensreceiving no earned income from you that consti-tutes income from sources within the United Statesto be eligible under this plan; or

3. You want to establish a SIMPLE 401(k) plan.

COMPLETING FORM 5304-SIMPLE

Form 5304-SIMPLE (pages 3 and 4) contains theoperative provisions of your SIMPLE IRA plan. ThisSIMPLE IRA plan is considered adopted when youhave completed all applicable boxes and blanksand it has been executed by you.

The SIMPLE IRA plan is a legal document withimportant tax consequences for you and youremployees. You may want to consult with yourattorney or tax advisor before adopting this plan.

EMPLOYEE ELIGIBILITY REQUIREMENTS (ARTICLE I)

Each year for which this SIMPLE IRA plan is effec-tive, you must permit salary reduction contributionsto be made by all of your employees who are reason-ably expected to receive at least $5,000 in compen-sation from you during the year, and who received atleast $5,000 in compensation from you in any twopreceding years. However, you can expand thegroup of employees who are eligible to participate inthe SIMPLE IRA plan by completing the optionsprovided in Article I, items 1a and 1b. To choosefull eligibility, check the box in Article I, item 1a.Alternatively, to choose limited eligibility, check thebox in Article I, item 1b, and then insert “$5,000”or a lower compensation amount (including zero)and “2” or a lower number of years of service in theblanks in (i) and (ii) of Article I, item 1b.

In addition, you can exclude from participationthose employees covered under a collectivebargaining agreement for which retirement benefitswere the subject of good faith bargaining. You maydo this by checking the box in Article I, item 2.Under certain circumstances, these employeesmust be excluded. See Which Employers MayEstablish and Maintain a SIMPLE IRA Plan? above.

SALARY REDUCTION AGREEMENTS(ARTICLE II)

As indicated in Article II, item 1, a salary reductionagreement permits an eligible employee to make asalary reduction election to have his or her compen-sation for each pay period reduced by a percentage(expressed as a percentage or dollar amount). Thetotal amount of the reduction in the employee’scompensation cannot exceed the applicableamount for any calendar year. The applicableamount is $10,000 for 2006. After 2006, the$10,000 amount may be increased for cost ofliving adjustments. In the case of an eligibleemployee who is 50 or older by the end of thecalendar year, the above limitation is increased by$2,000 for 2005 and by $2,500 for 2006. After2006, the $2,500 amount may be increased forcost of living adjustments.

TIMING OF SALARY REDUCTION ELECTIONS

For any calendar year, an eligible employee maymake or modify a salary reduction election during the 60-day period immediately preceding Jan uary 1of that year. However, for the year in which theemployee becomes eligible to make salary reductioncontributions, the period during which theemployee may make or modify the election is a 60-day period that includes either the date theemployee becomes eligible or the day before.

You can extend the 60-day election periods toprovide additional opportunities for eligible employeesto make or modify salary reduction elections usingthe blank in Article II, item 2b. For example, youcan provide that eligible employees may make newsalary reduction elections or modify prior electionsfor any calendar quarter during the 30 days beforethat quarter.

You may use the Model Salary ReductionAgreement on page 6 to enable eligible employeesto make or modify salary reduction elections.

Employees must be permitted to terminate theirsalary reduction elections at any time. They mayresume salary reduction contributions for the year if permitted under Article II, item 2b. However, bychecking the box in Article II, item 2d, you mayprohibit an employee who terminates a salaryreduction election outside the normal election cyclefrom resuming salary reduction contributions duringthe remainder of the calendar year.

CONTRIBUTIONS (ARTICLE III)

Only contributions described below may be made tothis SIMPLE IRA plan. No additional contributionsmay be made.

SALARY REDUCTION CONTRIBUTIONS

As indicated in Article III, item 1, salary reductioncontributions consist of the amount by which theemployee agrees to reduce his or her compensation.You must contribute the salary reduction contributionsto the financial institution selected by each eligible employee.

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Questions? Please call your financial advisor or Franklin Templeton Retirement Services at (800) 527-2020.8

SIMPLE IRA Employer Agreement Form 5304-SIMPLE (Rev. August 2005)

MATCHING CONTRIBUTIONS

In general, you must contribute a matching contri-bution to each eligible employee’s SIMPLE IRAequal to the employee’s salary reduction contribu-tions. This matching contribution cannot exceed3% of the employee’s compensation. See Definitionof Compensation below.

You may reduce this 3% limit to a lower percent-age, but not lower than 1%. You cannot lower the3% limit for more than two calendar years out of the five-year period ending with the calendar yearthe reduction is effective.

Note: If any year in the five-year period described above isa year before you first established any SIMPLE IRA plan,you will be treated as making a 3% matching contributionfor that year for purposes of determining when you mayreduce the employer matching contribution.

To elect this option, you must notify the employeesof the reduced limit within a reasonable period oftime before the applicable 60-day election periodsfor the year. See Timing of Salary ReductionElections above.

NONELECTIVE CONTRIBUTIONS

Instead of making a matching contribution, youmay, for any year, make a nonelective contributionequal to 2% of compensation for each eligibleemployee who has at least $5,000 in compensationfor the year. Nonelective contributions may not bebased on more than $220,000* of compensation.

To elect to make nonelective contributions, youmust notify employees within a reasonable periodof time before the applicable 60-day election peri-ods for such year. See Timing of Salary ReductionElections above.

Note: Insert “$5,000” in Article III, item 2b(i) to imposethe $5,000 compensation requirement. You may expandthe group of employees who are eligible for nonelectivecontributions by inserting a compensation amount lowerthan $5,000.

EFFECTIVE DATE (ARTICLE VII)

Insert in Article VII the date you want the provi-sions of the SIMPLE IRA plan to become effective.You must insert January 1 of the applicable yearunless this is the first year for which you are adopt-ing any SIMPLE IRA plan. If this is the first yearfor which you are adopting a SIMPLE IRA plan,you may insert any date between January 1 andOctober 1, inclusive of the applicable year.

ADDITIONAL INFORMATION

TIMING OF SALARY REDUCTION CONTRIBUTIONS

The employer must make the salary reductioncontributions to the financial institution selected byeach eligible employee for his or her SIMPLE IRAno later than the 30th day of the month followingthe month in which the amounts would otherwisehave been payable to the employee in cash.

The Department of Labor has indicated that mostSIMPLE IRA plans are also subject to Title I of theEmployee Retirement Income Security Act of 1974(ERISA). Under Department of Labor regulations at29 CFR 2510.3-102, salary reduction contribu-tions must be made to each participant’s SIMPLEIRA as of the earliest date on which those contribu-tions can reasonably be segregated from theemployer’s general assets, but in no event laterthan the 30-day deadline described above.

DEFINITION OF COMPENSATION

“Compensation” means the amount described inSection 6051(a)(3) [wages, tips and other compen-sation from the employer subject to federal incometax withholding under Section 3401(a)], and,amounts paid for domestic service in a privatehome, local college club, or local chapter of acollege fraternity or sorority. Usually, this is theamount shown in box 1 of Form W-2, Wage and TaxStatement. For further information, see Publication15, Circular E, Employer’s Tax Guide.Compensation also includes the salary reductioncontributions made under this plan, and, if applica-ble, compensation deferred under a Section 457plan. In determining an employee’s compensationfor prior years, the employee’s elective deferralsunder a Section 401(k) plan, a SARSEP or aSection 403(b) annuity contract are also includedin the employee’s compensation.

For self-employed individuals, compensation meansthe net earnings from self-employment determinedunder Section 1402(a), without regard to Section1402(c)(6), prior to subtracting any contributionsmade pursuant to this SIMPLE IRA plan on behalfof the individual.

EMPLOYEE NOTIFICATION

You must notify each eligible employee prior to theemployees’ 60-day election period described abovethat he or she can make or change salary reductionelections and select the financial institution thatwill serve as the trustee, custodian or issuer of theemployee’s SIMPLE IRA. In this notification, youmust indicate whether you will provide:

1. A matching contribution equal to your em -ployees’ salary reduction contributions up to a limitof 3% of their compensation;

2. A matching contribution equal to your employees’ salary reduction contributions subjectto a percentage limit that is between 1 and 3% of their compensation; or

3. A nonelective contribution equal to 2% of youremployees’ compensation.

You can use the Model Notification to EligibleEmployees on page 5 to satisfy these employeenotification requirements for this SIMPLE IRA plan.A Summary Description must also be provided toeligible employees at this time. This summarydescription requirement may be satisfied by providing a completed copy of Form 5304-SIMPLE(including the information described in Article VI—Procedures for Withdrawals).

If you fail to provide the employee notification(including the summary description) describedabove, you will be liable for a penalty of $50 perday until the notification is provided. If you canshow that the failure was due to reasonable cause,the penalty will not be imposed.

If the financial institution’s name, address, or with-drawal procedures are not available at the time theemployee must be given the summary description,you must provide the summary description withoutthis information. In that case, you will have reason-able cause for not including this information in thesummary description, but only if you ensure that itis provided to the employee as soon as administra-tively feasible.

REPORTING REQUIREMENTS

You are not required to file any annual informationreturns for your SIMPLE IRA plan, such as Forms5500 or 5500-EZ. However, you must report to theIRS which eligible employees are active partici-pants in the SIMPLE IRA plan and the amount ofyour employees’ salary reduction contributions tothe SIMPLE IRA plan on Form W-2. These con -tributions are subject to Social Security, medicare,railroad retirement and federal unemployment tax.

DEDUCTING CONTRIBUTIONS

Contributions to this SIMPLE IRA plan aredeductible in your tax year containing the end ofthe calendar year for which the contributions aremade.

Contributions will be treated as made for a particu-lar tax year if they are made for that year and aremade by the due date (including extensions) ofyour income tax return for that year.

SUMMARY DESCRIPTION

Each year the SIMPLE IRA plan is in effect, thefinancial institution for the SIMPLE IRA of eacheligible employee must provide the employer theinformation described in Section 408(I)(2)(B). Thisrequirement may be satisfied by providing theemployer a current copy of Form 5304-SIMPLE(including instructions) together with the financialinstitution’s procedures for withdrawals fromSIMPLE IRAs establis hed at that financial institu-tion, including the financial institution’s name andaddress. The summary description must bereceived by the employer in sufficient time tocomply with the Employee Notificationrequirements above.

There is a penalty of $50 per day imposed on thefinancial institution for each failure to provide thesummary description described above. However, ifthe failure was due to reasonable cause, thepenalty will not be imposed.

PAPERWORK REDUCTION ACT NOTICE

You are not required to provide the informationrequested on a form that is subject to thePaperwork Reduction Act unless the form displaysa valid OMB control number. Books or records relat-ing to a form or its instructions must be retained aslong as their contents may become material in theadministration of any Internal Revenue law.Generally, tax returns and return information areconfidential, as required by Section 6103.

The time needed to complete this form will varydepending on individual circumstances. The esti-mated average time is:

Recordkeeping . . . . . . . . . . . . . . . . 3 hr., 38 min.

Learning about the law or the form . . 2 hr., 26 min.

Preparing the form . . . . . . . . . . . . . . . . . 47 min.

If you have comments concerning the accuracy ofthese time estimates or suggestions for making thisform simpler, we would be happy to hear from you.You can write to the Internal Revenue Service, TaxProducts Coordinating Committee,SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW,IR-6406, Washington, DC 20224. Do not send this form to this address. Instead, keep it with your records.

*This is the amount for 2006. For later years, the limit may be increased for cost of living adjustments. The IRS announces the increase, if any, in a news release, in the Internal RevenueBulletin, and on the IRS website at www.irs.gov.

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9Questions? Please call your financial advisor or Franklin Templeton Retirement Services at (800) 527-2020.

Franklin Templeton SEP IRA How to Get Started

1. Complete and sign the SEP IRA Employer Agreement (IRS Form 5305-SEP) beginning on page 10.

The original form should be kept by the employer, although it is not required to be filed with the IRS.

2. Complete and sign the eContributions Services Employer Application on page 13 and eContributions

New User Request Form on page 15 to set up electronic delivery of your payroll contribution instructions.*

eContributions is a secure, proprietary, online payroll contribution instruction system that provides a

cost-efficient way to transmit plan contribution instructions, as well as access to current or historical

participant contribution information.

3. Employees must receive a copy of the completed SEP IRA Employer Agreement. (Future employees added

to the plan must receive a copy when they begin employment.) You should also provide employees with

the Franklin Templeton SEP IRA Employee’s Guide and the Franklin Templeton SIMPLE and SEP IRA

Employee’s Forms Booklet. Ask your financial advisor for these employee materials, order them online

at franklintempleton.com or call Franklin Templeton at (800) 527-2020. Your financial advisor can

also meet with your employees to explain the plan in more detail.

4. After reviewing prospectuses, employees will need to decide which Franklin Templeton funds they’d like

to invest in and must complete a Franklin Templeton SIMPLE/SEP IRA Application (included in the

Franklin Templeton SIMPLE and SEP IRA Employee’s Forms Booklet). If an employee would like to

transfer a SEP IRA account from another trustee to Franklin Templeton, he/she will also need to complete

a Franklin Templeton SIMPLE/SEP IRA Transfer Request Form (included in the Franklin Templeton

SIMPLE /SEP IRA Forms Booklet).

5. Send copies of the completed eContributions Services Employer Application, eContributions New

User Request Form, and all SIMPLE/SEP IRA employee applications to one of the addresses noted

below. You should be sure to keep copies for your records. If including a check, be sure to include

instructions for allocating the contributions to each participant. Future contribution instructions will

be submitted online through eContributions at ftecontributions.com.

*There is no fee to use eContributions, but there may be a fee assessed to those electing not to use the system.

Please mail to WEST COAST EAST COAST OVERNIGHT ADDRESS

Franklin Templeton Bank & Trust, F.S.B. Franklin Templeton Bank & Trust, F.S.B. Franklin Templeton Bank & Trust, F.S.B.c/o Retirement Services c/o Retirement Services c/o Retirement ServicesP.O. Box 997153 P.O. Box 33033 3344 Quality DriveSacramento, CA 95899-7153 St. Petersburg, FL 33733-8033 Rancho Cordova, CA 95670-7313

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Questions? Please call your financial advisor or Franklin Templeton Retirement Services at (800) 527-2020.10

Franklin TempletonSimplified Employee Pension—Individual

Retirement Accounts Contribution AgreementUnder Section 408(k) of the Internal Revenue Code

Form

5305-SEP(Rev. December 2004)Department of the Treasury Internal Revenue Service

OMB NO. 1545-0499

DO NOT FILE WITH INTERNAL REVENUE SERVICE

ARTICLE I—ELIGIBILITY REQUIREMENTS (Check applicable boxes—see instructions)

The employer agrees to provide discretionary contributions in each calendar year to the individual retirement account or individual retirement annuity (IRA) of allemployees who are at least __________ years old (not to exceed 21 years old) and have performed services for the employer in at least _________ years (not to exceed3 years) of the immediately preceding 5 years. This simplified employee pension (SEP) � includes � does not include employees covered under a collectivebargaining agreement, � includes � does not include certain nonresident aliens, and � includes � does not include employees whose total compensation duringthe year is less than $450.*

ARTICLE II—SEP REQUIREMENTS (See instructions)

The employer agrees that contributions made on behalf of each eligible employee will be:A. Based only on the first $220,000* of compensation.B. The same percentage of compensation for every employee.C. Limited annually to the smaller of $44,000* or 25% of compensation.D. Paid to the employee’s IRA trustee, custodian, or insurance company (for an annuity contract).

Employer’s signature and date Name and title

INSTRUCTIONS

(Section references are to the Internal RevenueCode unless otherwise noted.)

Purpose of Form—Form 5305-SEP (Model SEP) is used by an employer to make an agreement toprovide benefits to all eligible employees under aSimplified Employee Pension (SEP) described inSection 408(k).

Do not file Form 5305-SEP with the IRS. Instead,keep it with your records.

For more information on SEPs and IRAs, seePublication 560, Retirement Plans for SmallBusiness (SEP, SIMPLE, and Qualified Plans), and Publication 590, Individual RetirementArrangements (IRAs).

INSTRUCTIONS TO THE EMPLOYER

Simplified employee pension. A SEP is a writtenarrangement (a plan) that provides you with an easyway to make contributions toward your employees’retirement income. Under a SEP, you cancontribute to an employee’s traditional individualretirement account or annuity (Traditional IRA). Youmake contributions directly to an IRA set up by orfor each employee with a bank, insurance company,or other qualified financial institution. When usingForm 5305-SEP to establish a SEP, the IRA mustbe a Model Traditional IRA established on an IRSform or a master or prototype Traditional IRA forwhich the IRS has issued a favorable opinion letter.You may not make SEP contributions to a Roth IRAor a SIMPLE IRA. Making the agreement on Form5305-SEP does not establish an employer IRAdescribed in section 408(c).

When not to use Form 5305-SEP. Do not use thisform if you:

1. Currently maintain any other qualified retirementplan. This does not prevent you from maintaininganother SEP.

2. Have any eligible employees for whom IRAshave not been established.

3. Use the services of leased employees (describedin Section 414(n)).

4. Are a member of an affiliated service group(described in Section 414(m)), a controlled groupof corporations (described in Section 414(b)), ortrades or businesses under common control(described in Sections 414(c) and 414(o)), unless alleligible employees of all the members of suchgroups, trades, or businesses participate in the SEP.

5. Will not pay the cost of the SEP contributions. Donot use Form 5305-SEP for a SEP that provides forelective employee contributions even if the contribu-tions are made under a salary reduction agreement.Use Form 5305A-SEP, or a non-model SEP.

Note: SEPs permitting elective deferrals cannot be estab-lished after 1996.

Eligible employees. All eligible employees must beallowed to participate in the SEP. An eligibleemployee is any employee who: (1) is at least 21years old, and (2) has performed “service” for youin at least 3 of the immediately preceding 5 years.You can establish less restrictive eligibility require-ments, but not more restrictive ones.

Service is any work performed for you for anyperiod of time, however short. If you are a memberof an affiliated service group, a controlled group ofcorporations, or trades or businesses undercommon control, service includes any workperformed for any period of time for any othermember of such group, trades, or businesses.

Excludable employees. The following employees donot have to be covered by the SEP: (1) employeescovered by a collective bargaining agreementwhose retirement benefits were bargained for ingood faith by you and their union, (2) nonresidentalien employees who did not earn U.S. sourceincome from you, and (3) employees who receivedless than $450* in compensation during the year.

Contribution limits. You may make an annualcontribution of up to 25% of the employee’scompensation or $44,000*, whichever is less.Compensation, for this purpose, does not includeemployer contributions to the SEP or the employee’scompensation in excess of $220,000.* If you alsomaintain a salary reduction SEP, contributions tothe two SEPs together may not exceed the smallerof $44,000* or 25% of compensation for anyemployee.

You are not required to make contributions everyyear, but when you do, you must contribute to theSEP-IRAs of all eligible employees who actuallyperformed services during the year of the contribu-tion. This includes eligible employees who die orquit working before the contribution is made.

Contributions cannot discriminate in favor of highlycompensated employees. Also, you may not inte-grate your SEP contributions with, or offset themby, contributions made under the FederalInsurance Contributions Act (FICA).

If this SEP is intended to meet the top-heavy mini-mum contribution rules of Section 416, but it doesnot cover all your employees who participate inyour salary reduction SEP, then you must makeminimum contributions to IRAs established onbehalf of those employees.

Deducting contributions. You may deduct contribu-tions to a SEP subject to the limits of section404(h). This SEP is maintained on a calendar yearbasis and contributions to the SEP are deductiblefor your tax year with or within which the calendaryear ends. Contributions made for a particular taxyear must be made by the due date of your incometax return (including extensions) for that tax year.

_______________________________________________________________________ makes the following agreement under Section 408(k) of the Internal Revenue Code and

the instructions to this form.(Name of employer)

*This is the amount for 2006. For later years, this amount is subject to annual cost of living adjustments. The IRS announces the increase, if any, in a news release, in the Internal RevenueBulletin, and on the IRS website at www.irs.gov.

SEP IRA Employer Agreement

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11Questions? Please call your financial advisor or Franklin Templeton Retirement Services at (800) 527-2020.

Completing the agreement. This agreement isconsidered adopted when:

• IRAs have been established for all your eligibleemployees;

• You have completed all blanks on the agreementform without modification; and

• You have given all your eligible employees thefollowing information:

1. A copy of Form 5305-SEP.

2. A statement that Traditional IRAs other thanthe Traditional IRAs into which employer SEPcontributions will be made may provide differentrates of return and different terms concerning,among other things, transfers and withdrawals offunds from the IRAs.

3. A statement that, in addition to the informationprovided to an employee at the time the employeebecomes eligible to participate, the administratorof the SEP must furnish each participant within 30 days of the effective date of any amendment tothe SEP, a copy of the amendment and a writtenexplanation of its effects.

4. A statement that the administrator will givewritten notification to each participant of anyemployer contributions made under the SEP tothat participant’s IRA by the later of January 31 ofthe year following the year for which a contributionis made or 30 days after the contribution is made.

Employers who have established a SEP using Form5305-SEP and have furnished each eligibleemployee with a copy of the completed Form5305-SEP and provided the other documents anddisclosures described in Instructions to theEmployer and Information for the Employee, arenot required to file the annual information returns,Forms 5500 or 5500-EZ for the SEP. However,under Title I of the Employee Retirement IncomeSecurity Act of 1974 (ERISA), this relief from theannual reporting requirements may not be avail-able to an employer who selects, recommends, orinfluences its employees to choose IRAs into whichcontributions will be made under the SEP, if thoseIRAs are subject to provisions that impose anylimits on a participant’s ability to withdraw funds(other than restrictions imposed by the Code thatapply to all IRAs). For additional information onTitle I requirements, see the Department of Laborregulation at 29 CFR 2520.104-48.

INFORMATION FOR THE EMPLOYEE

The information below explains what a SEP is, howcontributions are made, and how to treat youremployer’s contributions for tax purposes. For moreinformation, see Publication 590.

Simplified employee pension. A SEP is a writtenarrangement (a plan) that allows an employer tomake contributions toward your retirement.Contributions are made to a traditional individualretirement account/annuity (Traditional IRA).Contributions must be made to either a ModelTraditional IRA executed on an IRS form or amaster or prototype Traditional IRA for which theIRS has issued a favorable opinion letter.

An employer is not required to make SEP contribu-tions. If a contribution is made, however, it must beallocated to all eligible employees according to theSEP agreement. The Model SEP (Form 5305-SEP)

specifies that the contribution for each eligibleemployee will be the same percentage of compen-sation (excluding compensation greater than$220,000*) for all employees.

Your employer will provide you with a copy of theagreement containing participation rules and adescription of how employer contributions may bemade to your IRA. Your employer must also provideyou with a copy of the completed Form 5305-SEPand a yearly statement showing any contributionsto your IRA.

All amounts contributed to your IRA by youremployer belong to you even after you stop workingfor that employer.

Contribution limits. Your employer will determinethe amount to be contributed to your IRA eachyear. However, the amount for any year is limitedto the smaller of $44,000* or 25% of yourcompensation for that year. Compensation does notinclude any amount that is contributed by youremployer to your IRA under the SEP. Your employeris not required to make contributions every year orto maintain a particular level of contributions.

Tax treatment of contributions. Employer contribu-tions to your SEP-IRA are excluded from yourincome unless there are contributions in excess ofthe applicable limit. Employer contributions withinthese limits will not be included on your Form W-2.

Employee contributions. You may make regular IRAcontributions to an IRA. However, the amount youcan deduct may be reduced or eliminated because,as a participant in a SEP, you are covered by anemployer retirement plan.

SEP participation. If your employer does notrequire you to participate in a SEP as a conditionof employment, and you elect not to participate, allother employees of your employer may be prohib-ited from participating. If one or more eligibleemployees do not participate and the employertries to establish a SEP for the remaining employ-ees, it could cause adverse tax consequences forthe participating employees.

An employer may not adopt this IRS Model SEP ifthe employer maintains another qualified retire-ment plan. This does not prevent your employerfrom adopting this IRS Model SEP and also main-taining an IRS Model Salary Reduction SEP orother SEP. However, if you work for several employ-ers, you may be covered by a SEP of one employerand a different SEP or pension or profit sharingplan of another employer.

SEP-IRA amounts—rollover or transfer toanother IRA. You can withdraw or receive fundsfrom your SEP-IRA if, within 60 days of receipt,you place those funds in the same or another IRA.This is called a “rollover” and can be done withoutpenalty only once in any 1-year period. However,there are no restrictions on the number of timesyou may make “transfers” if you arrange to havethese funds transferred between the trustees or thecustodians so that you never have possession ofthe funds.

Withdrawals. You may withdraw your employer’scontribution at any time, but any amount withdrawnis includible in your income unless rolled over. Also, ifwithdrawals occur before you reach age 591/2, youmay be subject to a tax on early withdrawal.

Excess SEP contributions. Contributions exceedingthe yearly limitations may be withdrawn without

penalty by the due date (plus extensions) for filingyour tax return (normally April 15), but are includi-ble in your gross income. Excess contributions leftin your SEP-IRA after that time may have adversetax consequences. Withdrawals of those contribu-tions may be taxed as premature withdrawals.

Financial institutional requirements. The financialinstitution where your IRA is maintained mustprovide you with a disclosure statement thatcontains the following information in plain,nontechnical language:

1. The law that relates to your IRA.

2. The tax consequences of various optionsconcerning your IRA.

3. Participation eligibility rules, and rules on thedeductibility of retirement savings.

4. Situations and procedures for revoking your IRA,including the name, address, and telephone numberof the person designated to receive notice of revoca-tion. This information must be clearly displayed atthe beginning of the disclosure statement.

5. A discussion of the penalties that may beassessed because of prohibited activities concern-ing your IRA.

6. Financial disclosure that provides the followinginformation:

(a) Projects value growth rates of your IRA undervarious contribution and retirement schedules, ordescribes the method of determining annual earn-ings and charges that may be assessed.

(b) Describes whether, and for when, the growthprojections are guaranteed, or a statement of theearnings rate and the terms on which the projec-tions are based.

(c) States the sales commission for each yearexpressed as a percentage of $1,000.

In addition, the financial institution must provideyou with a financial statement each year. You maywant to keep these statements to evaluate yourIRA’s investment performance.

PAPERWORK REDUCTION ACT NOTICE

You are not required to provide the informationrequested on a form that is subject to the PaperworkReduction Act unless the form displays a validOMB control number. Books or records relating to aform or its instructions must be retained as long astheir contents may become material in the adminis-tration of any Internal Revenue law. Generally, taxreturns and return information are confidential, asrequired by Section 6103.

The time needed to complete this form will varydepending on individual circumstances. The estimated average time is:

Recordkeeping . . . . . . . . . . . . . . . 1 hr., 40 min.

Learning about the law or the form . . 1 hr., 35 min.

Preparing the form . . . . . . . . . . . . 1 hr., 41 min.

If you have comments concerning the accuracy ofthese time estimates or suggestions for makingthis form simpler, we would be happy to hear fromyou. You can write to the Internal Revenue Service,Tax Products Coordinating Committee,SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW,Washington, DC 20224. Do not send this form tothis address. Instead, keep it with your records.

*This is the amount for 2006. For later years, this amount is subject to annual cost of living adjustments. The IRS announces the increase, if any, in a news release, in the Internal RevenueBulletin, and on the IRS website at www.irs.gov.

SEP IRA Employer Agreement

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13Questions? Please call your financial advisor or Franklin Templeton Retirement Services at (800) 527-2020.

For assistance, please visit us online at www.ftecontributions.com or call Retirement Services at (800) 527-2020.

1 COMPANY INFORMATION

______________________________________________ (“Employer”) requests the ability to deliver Plan Contribution Instructions (defined below),which accompany monetary contributions relating to the retirement plan identified below, to Franklin Templeton Bank & Trust, F.S.B. (“FTB&T”),the trustee/custodian of the identified retirement plan, via the Internet or other electronic means.

Total number of employees currently eligible to participate in retirement plan: ________

Company name (please print) Group number (if available)

eContributions Services Employer Application

2 TYPE OF RETIREMENT PLAN MAINTAINED BY THE EMPLOYER

■■ FTB&T SIMPLE IRA ■■ FTB&T 403(b) Plan ■■ FTB&T Profit Sharing Plan■■ FTB&T SEP IRA ■■ FTB&T Texas Optional Retirement Plan (ORP) ■■ FTB&T Money Purchase Plan

(continued)

3 SIGNATURES

IN CONSIDERATION OF FTB&T’s agreement to accept Plan Contribution Instructions by electronic means without original or underlying docu-mentation, Employer agrees as follows:

The term “Plan Contribution Instructions” shall mean instructions from Employer to FTB&T to invest specified monetary amounts in pre-establishedaccounts of participants of the above-identified plan with such instructions being transmitted by Employer either 1) by the completion of a pre-populatedonline form on the password protected website (“eContributions”), or 2) by electronic transmission of payroll files from exports of existing softwarepackages.

Employer shall designate individuals as authorized users of eContributions who will then have the ability to access the website to submit PlanContribution Instructions, update employer address and other contact information (such as phone number and email address) for the retirement planand to print a contribution summary to accompany the contribution check. Employers submitting monetary contributions by ACH (AutomatedClearing House) or Fed Wire will also be able to use eContributions to transmit the Plan Contribution Instructions. Employer shall submit a separateapplication (eContributions New User Request Form) for each individual to whom it wishes to grant access to eContributions. Unique user namesand personal identification numbers (“PIN(s)”) will be established for each of these individuals and will be sent to Employer’s address of record viathe United States Postal Service upon receipt of this Application and submission of at least one completed eContributions New User Request Form. It isthe sole responsibility of Employer to control the security and confidentiality of the user name(s) and PIN(s), and Employer acknowledges and agreesthat FTB&T may rely upon any Plan Contribution Instructions being transmitted under a user name and PIN issued to Employer.

The undersigned Employer directs FTB&T to use electronic transmissions of Plan Contribution Instructions, remitted by individuals designated byEmployer to use eContributions, to invest monetary contributions to accounts of participants in the above identified retirement plan. Employer issolely responsible for transmitting accurate Plan Contribution Instructions to FTB&T, and for bearing the cost of adjusting a participant’s accountshould any errors occur as a result of Employer’s Plan Contribution Instructions. If Employer is transmitting Plan Contribution Instructions for a403(b) salary deferral only plan, Employer further represents that it has entered into salary deferral agreements with its employees for whom it istransmitting Plan Contribution Instructions.

Employer agrees that participant’s receipt of a statement detailing contributions to the retirement plan will constitute Employer’s and participant’sratification of such contributions.

Employer shall indemnify and hold harmless FTB&T and its service provider, Franklin Templeton Investor Services, LLC, and their officers, employ-ees, agents and successors (each an “Indemnitee” and collectively the “Indemnitees”) from and against any and all liability, loss, suits, claims, costs,damages and expenses of whatever amount and whatever nature, including without limitation, reasonable attorneys’ fees, whether for consultationand advice, or representation in arbitration or litigation (an “Indemnifiable Loss”) any Indemnitee may sustain or incur by reason of, in consequenceof, or arising from, or in connection with, or in relation to an Indemnitee acting or forbearing from taking action in good-faith reliance on PlanContribution Instructions from Employer or its designee made pursuant to this Application, including, but not limited to, sums paid or liabilityincurred in settlement of, and expenses paid or incurred in connection with such claims, or judgments as may arise out of the allegations that theEmployer’s Plan Contribution Instruction on which an Indemnitee acted or forbore from taking action was not in accordance with the participant’sspecified retirement account investment instructions and/or was not transmitted by an authorized agent of Employer, excepting, however, anIndemnifiable Loss to the extent such loss can be attributed to the gross negligence or willful misconduct of FTB&T.

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14 Questions? Please call your financial advisor or Franklin Templeton Retirement Services at (800) 527-2020.

3 SIGNATURES (cont’d.)

Employer acknowledges and agrees that FTB&T may for any reason, at any time, upon notice to Employer discontinue accepting Plan ContributionInstructions by electronic means.

EMPLOYER SIGNATURE Date

XAuthorized Officer signature

Name (please print) Title

By signing below, Employer authorizes FTB&T, or its service provider Franklin Templeton Investor Services, LLC, to initiate electronic debits to thedeposit account identified above (“Bank Account”) when instructed to do so by Employer on eContributions (and to make, if necessary, adjustingtransfers if any amounts are transferred in error). FTB&T, or its service provider Franklin Templeton Investor Services, LLC, will debit Bank Accountwithin three days of receipt of each set of completed Plan Contribution Instructions through eContributions for the amount designated in the“Target” field on eContributions.

Employer understands and agrees that this authorization will remain in full force and effect until FTB&T has received notification from Employer’sauthorized officer that the authorization is terminated and FTB&T and the Employer’s bank noted above (“Bank”) have had a reasonable opportunityto act on the notification. Employer also agrees that FTB&T, or its service provider, may make additional attempts to debit the Bank Account notedabove if an initial attempt fails, and if a transfer is denied by the Bank for any reason, FTB&T will discontinue this authorization.

Date Date

X XAuthorized Signer of Bank Account Authorized Signer of Bank Account

Name and Title (please print) Name and Title (please print)

4 ELECTRONIC FUNDS TRANSFER AUTHORIZATION

If you would like to facilitate the delivery of Plan contributions by authorizing FTB&T, or its service provider Franklin Templeton Investor Services,LLC, to initiate debits against your company’s designated bank account in accordance with your Plan Contribution Instructions, please provide therequested information below. Please note that your bank must be a member of the Automated Clearing House (ACH). Allow up to 15 business days forFTB&T to set up your bank account instructions.

Group number (if available)

ACCOUNT INFORMATIONBank Account Owner/Employer name

Bank name Bank account number■■ Checking account■■ Savings account

PLEASE TAPE A VOIDED CHECK OR SAVINGS ACCOUNT DEPOSIT SLIP IMPRINTED WITH EMPLOYER’S NAME AND ADDRESS BELOW.

Please mail to WEST COAST EAST COAST

Regular Franklin Templeton Bank & Trust, F.S.B. Franklin Templeton Bank & Trust, F.S.B.c/o Retirement Services c/o Retirement ServicesP.O. Box 997153 P.O. Box 33033 Sacramento, CA 95899-7153 St. Petersburg, FL 33733-8033

Overnight Franklin Templeton Bank & Trust, F.S.B. Franklin Templeton Bank & Trust, F.S.B.c/o Retirement Services c/o Retirement Services3344 Quality Drive 100 Fountain ParkwayRancho Cordova, CA 95670-7313 St. Petersburg, FL 33716-1205

By completing this section, your company will be able to authorize plan contributions directlythrough eContributions and will not need to provide separate payment via check or Federal wire.

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15Questions? Please call your financial advisor or Franklin Templeton Retirement Services at (800) 527-2020.

Complete this form to create a new eContributions user profile. Once established, Franklin Templeton will mail a temporary Login ID and password to the user address provided below.

For assistance, please visit us online at www.ftecontributions.com or call Retirement Services at (800) 527-2020.

Company Name (please print) Group Number (if available)

NEW USER INFORMATION

A unique Login ID and password are requested for the following individual:

New User Name (please print) Title

Street Address Phone Number

City State ZIP Email Address

EMPLOYER AUTHORIZATION

The Employer Authorized Officer is responsible for notifying Franklin Templeton Investments of any modifications to the status of the authorizedrepresentative herein assigned. The Employer Authorized Officer affirms that the individual listed above is authorized to access eContributions as arepresentative of the Employer. This access can be revoked at any time with written or verbal notice to Franklin Templeton Investments from theEmployer Authorized Officer.

Date

X

Signature: Employer Authorized Officer

Authorized Officer Name (please print) Title

Email Address Phone Number

Please send to WEST COAST EAST COAST

Regular Mail Franklin Templeton Investments Franklin Templeton InvestmentsP.O. Box 997152 P.O. Box 33033Sacramento, CA 95899-7152 St. Petersburg, FL 33733-8033

Overnight Franklin Templeton Investments Franklin Templeton Investments3344 Quality Drive 100 Fountain ParkwayRancho Cordova, CA 95670-7313 St. Petersburg, FL 33716-1205

Fax 916/463-4574 727/299-8719

eContributions New User Request Form

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16 Questions? Please call your financial advisor or Franklin Templeton Retirement Services at (800) 527-2020.

Please mail to WEST COAST EAST COAST

Franklin Templeton Bank & Trust, F.S.B. Franklin Templeton Bank & Trust, F.S.B.c/o Retirement Services c/o Retirement ServicesP.O. Box 997153 P.O. Box 33033 Sacramento, CA 95899-7153 St. Petersburg, FL 33733-8033

Overnight Franklin Templeton Bank & Trust, F.S.B. Franklin Templeton Bank & Trust, F.S.B.c/o Retirement Services c/o Retirement Services3344 Quality Drive 100 Fountain ParkwayRancho Cordova, CA 95670-7313 St. Petersburg, FL 33716-1205

Franklin Templeton eContributionsHow to Fund Your Plan

1. By Electronic Funds Transfer

You may authorize us to debit your bank account by electronic funds transfer. You can sign up for this

service using the eContributions Services Employer Application, or at a later time by completing the

Electronic Funds Transfer Authorization Request Form available at ftecontributions.com.

2. By ACH or Wire

You may also choose to send your contributions to Franklin Templeton electronically. To do this, please

submit contributions by ACH or Fed Wire to:

Chase Manhattan Bank

ACH Instructions

ABA #: 021000021

Account #: 910-2-771996

Reference: Name of Employer and Group Number

Wire Instructions

ABA #: 021000021

Account #: 323117694

Reference: Name of Employer and Group Number

3. By Check

If you are sending your contributions by check, please mail to one of the addresses below.

In order for us to identify and process your contributions in a timely manner, you may submit yourcontributions to us in one of the following ways:

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Franklin Templeton Distributors, Inc. RSBP FER 12/10

< GAIN FROM OUR PERSPECTIVE® >

Franklin Templeton Bank & Trust, F.S.B.c/o Retirement Services

West Coast P.O. Box 997153Sacramento, CA 95899-7153

East Coast P.O. Box 33033St. Petersburg, FL 33733-8033

(800) 527-2020frank l in temple ton .com


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